Greece's Deflation Problem Got Less Worse

"Less worse" is a weird phrase, but it seems to characterize Greece's pricing problem well.

According to new data from ELSTAT, Greece's consumer price index fell 1.5% year-over-year in January. That's right. It fell. Greece's is an economy experiencing deflation.

If there's a positive spin to any of this data, it's that the pace of decline in prices appears to be decelerating (see chart below).

Deflation is a scary thing because it encourages consumers to hold off on purchases as prices go lower. Unfortunately, this effectively forces producers to cut prices even further. All of this has the potential to spiral, bringing down wages and the entire economy with it.